One hundred million Americans are saddled with healthcare debt in a country where half the population doesn’t have enough savings to cover a $500 healthcare bill. This, according to a recent investigation by Kaiser Health News and NPR.
Many of these patients have employer-sponsored coverage and are still counted among those struggling with debt. These are folks who’ve received care and are now indebted to hospitals, doctor’s offices, credit card companies, and friends and family.
The pressures of medical debt lead people to forgo care or be denied care, exacerbating chronic conditions and leaving new diagnoses untreated. They’re liquidating their retirement savings and declaring bankruptcy because of one major medical emergency. They’re cutting back on food (!) and day-to-day necessities just to cover medical bills.
Essentially, their lives are being destroyed because of medical debt. I think it’s official — we can call this a crisis.
How Did We Get Here
This crisis is taking place just as deductibles have continued to grow year after year in near lockstep with out-of-pocket expenses. The stress caused by this, coupled with the ever-present threat of some as-yet-unforeseen, unavoidable medical emergency, is taking its toll on employees who are already stressed out about inflation and gas prices and the obligations of daily life. These factors aren’t good for well-being, and they aren’t good for productivity.
The medical benefits employers provide are designed to offer some peace of mind, but there’s mounting evidence that traditional offerings are just not enough. As the numbers show, people are still going into debt despite having coverage.
Of course, there’s a relatively simple reason why this is happening — they just don’t have enough money to cover the expense.
An Abundance of Challenges
This is already a challenging time for employers, especially those who work diligently to help support their employees. In this tight labor market, many organizations have already increased compensation and broadened their total rewards package to attract and retain talent.
But there is a limit where benefits costs must be contained for the business to profitably function. So many employers feel like they’re in between a rock and a hard place when faced with the brutal truth that employees are still struggling with high deductibles, enormous out-of-pocket costs, and unexpected medical expenses despite having really competitive benefits packages. It can be so frustrating.
Fortunately, where traditional benefits end, voluntary benefits come into play. Right in that gap is a great opportunity to improve the situation for everyone. With the use of employee-paid supplemental health benefits on the rise (according to PlanSponsor), employees are showing more interest in health-related voluntary benefits and ways to better prepare themselves to manage medical costs.
For employers, empowering better outcomes with these benefits, such as critical illness, disability and hospital indemnity, comes at no cost. It’s an expansion of an offering that not only helps manage costs but also demonstrates a commitment to employees who want flexibility and financial security in their coverage, and outside of the time it takes to set up the plan, it costs an employer nothing.
Will such a move solve this crisis for 100% of all employees? Absolutely not. Will it help a hell of a lot of people though? You bet. And it could mean the difference between financial security and financial ruin for those essential to your organization’s success.
Written by Kimberly Heald, vice president, voluntary benefits.